Relationship Management (RM) has taken on many forms over the years and is not a new concept. In Private Public Projects (PPP), this relationship becomes more complicated given that the government is involved. Zou, Kumaraswamy, Chung, and Wong (2014) mentioned three vital and fruitful ingredients for effective RM in PPP.
These were commitment and participation of senior management, defining the objectives of the RM strategy and the integration of the divisions of the organisation.
Commitment and participation were the key ingredients that related to the management and communication of the PPP projects. As both the private and public sector became more dependent on each other, interacted more and were becoming more interrelated, some degree of control was lost upwards and downwards. The base for RM was the contractual agreement between the relevant parties. Although this could not be forced, the contract formed a platform for the development of proper RM provided that the commitment from all levels, especially senior management, was present. The contract had to be open and transparent to facilitate open and clear communication that supported the RM aspect. However, to create relationships to manage in the first place, there must be a base of trust and satisfaction in any working relationship.
To define relationship indicators, the study conducted by Meng (2011) regarding RM in the supply chain for construction projects was considered. The key indicators were presented in ten areas: mutual objectives, gain and pain sharing, trust, no-blame culture, joint working, communication, problem-solving, risk allocation, performance measurement and continuous improvement. The emphasis on RM was generally in line with the evolution from traditional to modernised methods of collaboration. The reason for this was the major influence of effective RM on project performance.
Yet, there were challenges in managing the relationship factor as mentioned by Bond-Barnard et al. (2018). These presented themselves in the reduction for demand in projects which increased the difficulty to form trust and commitment in project teams. Often a single project was utilised as a base for trust which was not a good measure as trust required time to develop. The uniqueness and complexity of projects also played a significant role as most projects were a once-off occurrence and repeating these endeavours was highly unlikely.
In addition, McCord and Gunderson (2014) in their study pertaining to factors that affected the relationship between general and subcontractors, touched on a key issue which was the role of the project manager. The top two categories that affected the relationship were bid shopping (using the lowest quote obtained to obtain better prices from other subcontractors) and the PM relationship factor which was divided further into two subcategories: fairness and capability. Their respondents rated the fairness factor more often than the capability factor. Their finding regarding this category was that it was the project manager’s responsibility to promote teamwork and to create an environment that was conducive to cooperation. They asserted that the people management and administrative skills of the project manager had a direct effect on project success (Ahmed, Azmi, Masood, Tahir, & Ahmad, 2013; Rezvani, et al., 2016; McCord & Gunderson, 2014).
Relationships are vital in projects as they provide a base for collaboration between parties. Prior ties affected trust development. This meant that a team that had previously worked together were quicker to establish integrative work practices and create a common philosophy. Furthermore, key individuals were familiar with one another’s preferences which enabled clear roles and expectations and influenced open communication early in the project (Buvik & Rolfsen, 2015). The study of Buvik and Rolfsen (2015) focused on the project team within the organisation as well as the client and subcontractors. This may not be a practical approach to most projects, however, the benefits of having key people with prior ties manage and execute a project could deliver evidence of swift trust, which is based on the presumed knowledge of the competence of others.
For RM to exist in principle there needs to be some form of collaborative effort among parties, which in turn leads to a trust-based relationship. Collaboration occurred in
various forms such as inter-personal, inter-organisational, intra- organisational or between an organisation and its client (Bond-Barnard et al., 2018). The degree of collaboration or cooperation was defined as the repetitive process where people and organisations work towards a common goal or objective by sharing knowledge, making trade-offs and obtaining consensus and clarification on relevant issues.
Teams that had developed a trust base were better equipped to exploit this aspect.
In the findings of Bond et al. (2018), the coordination and relationships had the highest and second-highest correlation respectively with collaboration and emphasised the importance of teamwork and team member relationships. Lau and Rowlinson (2011) commented that bilateral relationship improvement required better communication. For trust to be developed, daily contact was required as well as faith in senior management and the client. However, a tripartite relationship was more difficult and required that trust be cultivated and even more so in a multi-party relationship such as teamwork.
With the same view, Ling, Ong, Ke, ShouQuing, and Zou (2014) looked at the relationship contracting (RC) aspect in public projects. The types of RC included:
partnering on a project at strategic level, joint ventures, PPP and project and strategic alliances. Their comparison of this aspect between Beijing and Sydney brought a different view as the factors that drove RC in Beijing and Sydney were the same but the barriers (six in Beijing and one in Sydney) were different. This was explained by cultural differences and public perception as one of the barriers related to the public perception of corruption in Sydney. They did concede that open economies with low corruption were better suited to RC. They also stated that RC was more efficient and effective than legal compliance.
Mouzas and Blois (2013) stated that the grounds for RC were dubious since contract theory makes no provision for the relationship paradigm and is destined to remain out of touch with reality. However, RC had limitations and the most important limitation was that RC was not recognised as a legal category in common law countries. The researcher’s view is that RC has a role within the legal compliance aspect of contract management and should be an additional management tool to achieve project success. This opinion supports the view of Mouzas and Blois (2013)
where they state that RC and formal contracts are not substitutes but function as complements.
Customer satisfaction in working relationships has been one of the key factors in determining project success and plays an important role in developing trust between stakeholders. Project success could not be limited to the traditional ‘iron triangle’
criteria: time, cost and quality (Rashvand & Abd Majid, 2014). Undoubtedly, customer and client satisfaction formed an integral part of performance management, which in turn, gauged the overall performance of either party on projects. Their analysis of past literature regarding this topic was the base of the results that the authors produced in their study as can be seen in Figure 5. This generalist approach to customer satisfaction criteria (Rashvand & Abd Majid, 2014), highlighted the weight that each party had assigned to one of the seven factors that had been identified.
Figure 5: Respondents’ perspectives on (a) customer satisfaction criteria; (b) client satisfaction criteria
Source: Rashvand and Abd Majid (2014)
As the bar charts indicated, all groups (project manager and customer; and client and contractor) have different views on customer satisfaction criteria and client satisfaction criteria. Trust and relationships played a pivotal role in managing expectations, demonstrating competence, creating and maintaining the correct perception, showing commitment and communication. These five criteria had an influence on the remaining two and could increase or maintain profitability and reduce the dispute resolution aspect, which is a corrosive element within project and contract management and contract administration.